What drives your business?

Business drivers are the factors that have a significant impact on the success and growth of an organisation. They can be internal or external, and can include factors such as market trends, consumer behaviour, competition, and the overall economic environment.

Business drivers and key performance indicators (KPIs) are closely related and often integrated in the overall strategy of a business. KPIs are a way to operationalise and measure the impact of the business drivers on performance. For example, if a business driver is market trends, a KPI to track performance in relation to that driver would be market share. By tracking market share, you can measure progress toward capturing a larger share of the market, which can indicate success in adapting to and capitalising on market trends.

Other examples of drivers include:

1. Market trends: the direction and pace of market trends can have a significant impact on success. Understanding market trends and anticipating changes can help you to stay ahead of the competition and capitalise on new opportunities.
2. Consumer behaviour: this is a key driver of business success. Understanding the needs, preferences, and buying habits of your clients/customers can help to develop products and services that meet their needs and in turn increase sales.
3. Competition: understanding the competitive landscape and the strengths and weaknesses of competitors can help to develop strategies that give an edge in the marketplace.
4. Economic environment: the overall economic environment can also have a significant impact on a business’s success. Factors such as interest rates, inflation, and GDP can affect consumer spending and business investment, which can impact an sales and profitability.
5. Innovation: businesses that are able to innovate and adapt to changes in their industry tend to be more successful than those that don't. Innovation can come in many forms, from new products, services, processes, or business models.
6. Human Capital: is one of the most important drivers of a business, as it represents the knowledge, skills, and abilities of the employees of an organisation. Businesses that invest in their employees, and provide them with the necessary training, development, and resources, can achieve better performance and higher productivity.
7. Brand: a brand that is well-known, respected and trusted can help to attract and retain customers, and increase sales.
8. Supply Chain: an efficient and effective supply chain can help to improve your efficiency, reduce costs, and increase customer satisfaction.

Business drivers and KPIs are closely related and often integrated in the overall strategy of your business. Business drivers are the factors that have a significant impact on the success and growth of a business, while KPIs are specific, measurable, and time-bound metrics that are used to track performance and progress towards goals. By tracking KPIs, you can measure the impact of business drivers on their performance.

If you are confident with your drivers and KPIs it might be worth pondering how well do you know your numbers in this article, or how you analyse and present this data.

Need help in identifying or aligning your business drivers and KPIs, or planning to best respond and maximise results?

Reach out to our team of expert Toowoomba and Stanthorpe Accountants and Business Advisors. Or find out more about our community of like-minded businesses that meet quarterly and are supported ongoing by a Power Tynan business coach.